Angola keen on South African companies entering its diamond sector

3rd August 2018 By: Rebecca Campbell - Creamer Media Senior Deputy Editor

Angola is working to ensure that the major South African diamond companies can operate in the country. This was stated recently by Endiama Strategic Planning and Minerals Operations Bureau head Laureano Paulo. (Endiama is Angola’s State-owned national diamond company. Its name is an acronym for Empresa Nacional de Prospecção, Exploracão, Lapidação e Comercialização de Diamantes de Angola – in English, the National Company of Angola for the Prospecting, Exploitation, Polishing and Marketing of Diamonds.)

Paulo made the remarks during a visit by a delegation of South African businesspeople to the head office of Endiama, in Luanda, reported the newspaper O País. He also remarked that the participation of South African companies in Angola’s diamond industry would add value to the resource, taking into account the experience they had in the diamond sector. The companies represented by the delegation were not identified by the journal.

Angola’s current (2018 to 2022) National Development Plan, which was approved by the country’s Council of Ministers (Cabinet) in April, seeks to significantly increase diamond production in the nation. The target figure is 13.8-million carats a year. For comparison, Angolan diamond production last year totalled 9.4-million carats. This increase will be driven by the commissioning of various new mines, but particularly by the start of operations at Luaxe.

Luaxe, in Lunda Sul province, will be commissioned this year; it has a reported reserve of some 350-million carats in the Luele Kimberlite pipe and will be the world’s biggest Kimberlite mine. The operation is projected to have a life-of-mine of 29 years, cover a surface area of 100 ha and reach a depth of 400 m.

Paulo pointed out that exploration for, and exploitation of, new kimberlites were being implemented by the sector was doing. This had led to the recognition of the potential provided by South African companies, which had a great tradition in the diamond industry.

The Angolan diamond sector accrued gross revenues of $1.1-billion last year, achieving an average price of $113/ct. No less than 89.22% of the country’s production came from the Sociedade Mineira de Catoca (Catoca Mining Company). This enterprise is jointly owned by Endiama (41%), Russian State-owned diamond mining major Alrosa (also 41%) and private-sector LL International Holding (18%).

Catoca is reported to be the fourth- largest diamond producer in the world. It is equipped with two processing plants and processes more than ten-million tons of ore a year. Its annual rough diamond output is about 6.8-million carats. Its reserves are estimated at 60-million carats.

In turn, Catoca holds 50.5% of Luaxe International Enterprise, which owns the Luaxe project. In addition to its indirect shareholding in Luaxe, through its stake in Catoca, Alrosa directly owns 8% of Luaxe.